Why Big Tech Is Pouring Money Into Carbon Removal

Summary

The market for carbon removal is rapidly growing as companies innovate ways to capture and permanently store CO2 from the atmosphere. Leading tech companies like Stripe, Alphabet, and Shopify are investing heavily in startups developing various technologies for long-term carbon storage, including direct air capture and bio-oil injection. While trees help reduce CO2, scalable solutions like Climeworks and Charm Industrial are vital. Experts estimate that removing 10 billion tons of CO2 annually by 2050 is crucial to mitigating climate change, and diverse approaches will be needed to achieve this goal.

Takeaways

• 🌍 The carbon removal market is rapidly growing, with hundreds of millions being invested.
• 💼 Major tech companies like Stripe, Alphabet, Meta, and Shopify have committed nearly $1 billion in funding to carbon removal startups.
• 🌱 Experts say 10 billion tons of CO2 need to be removed annually by 2050, beyond emissions reductions.
• 🏭 Carbon removal involves storing CO2 permanently, unlike recycling it for temporary products like carbonated beverages or fuels.
• 🪨 Some companies are using methods like mineralizing CO2 in rocks or injecting it into concrete for permanent storage.
• 🚜 Charm Industrial converts plant residue into bio oil, which is injected underground for long-term storage.
• 🌊 Planetary Hydrogen is working on ocean-based carbon capture by neutralizing acidic CO2 in seawater, turning it into bicarbonate.
• 🌳 Simple methods like planting trees aren't enough due to space limitations; scalable tech-based solutions are required.
• 💰 Stripe, Shopify, and others are investing in carbon removal startups to accelerate development and reduce costs.
• 🇺🇸 Governments are supporting carbon removal, with the U.S. recently launching a $3.5 billion program to develop carbon capture hubs.

Q & A

What is the main focus of the carbon removal market?

The carbon removal market focuses on pulling carbon dioxide (CO2) from the atmosphere and finding permanent storage solutions for it. This includes a wide array of technologies aimed at reducing atmospheric CO2 and mitigating climate change.

How much CO2 needs to be removed from the atmosphere annually by 2050, according to experts?

Experts estimate that 10 billion tons of CO2 need to be removed from the atmosphere every year by 2050 to avert the worst effects of climate change.

What distinguishes carbon removal from carbon capture in industrial processes?

Carbon removal refers to permanently taking legacy CO2 out of the atmosphere, while carbon capture is about preventing emissions from industrial processes (like capturing CO2 from smokestacks) and often using it for temporary products, such as carbonated beverages or plastics.

Which major companies have committed early-stage funding to carbon removal startups?

Companies like Stripe, Alphabet, Meta, and Shopify have committed nearly a billion dollars in early-stage funding to carbon removal startups.

What are some of the technological approaches for storing captured CO2?

Some approaches for storing captured CO2 include injecting it into rocks to mineralize it, turning it into bicarbonate in seawater, converting it into bio-oil and injecting it underground, and injecting CO2 into concrete to make it stronger.

Why isn't planting trees alone a sufficient solution for removing CO2 from the atmosphere?

Planting trees is not sufficient because the available land area is limited. Removing 10 billion tons of CO2 annually would require an area the size of Europe, which is not feasible.

How do direct air capture companies like Climeworks remove CO2 from the atmosphere?

Direct air capture companies like Climeworks use giant fans and chemical processes to capture CO2 from the air. They then work with partners like Carbfix to store the CO2 underground, where it mineralizes and becomes solid stone.

What is pyrolysis, and how does Charm Industrial use it for carbon removal?

Pyrolysis is the process of rapidly heating biomass to convert it into bio-oil. Charm Industrial uses this technique to transform carbon-rich plant material into bio-oil, which is then injected deep underground for long-term storage.

How does Planetary Hydrogen's ocean-based approach to carbon removal work?

Planetary Hydrogen adds a mild antacid derived from rocks to seawater, neutralizing the CO2 in the water. This increases the ocean's capacity to absorb more CO2 from the atmosphere and stores it as bicarbonate, which can last for 100,000 years.

What role do governments and carbon markets play in supporting carbon removal technologies?

Governments can support carbon removal by implementing carbon pricing schemes and tax incentives. Carbon markets, like those in Europe, Canada, and China, create demand for carbon removal, and there is growing interest in establishing such markets in the U.S.

Outlines

00:00

🌍 Expanding Carbon Removal Market

The carbon removal market is growing rapidly, with significant funding from companies like Stripe, Alphabet, Meta, and Shopify. These firms are investing in technologies that permanently remove CO2 from the atmosphere. This differs from methods that capture emissions for temporary use, such as in beverages or fuel production. Experts emphasize that to address climate change, removing 10 billion tons of CO2 annually by 2050 is necessary, and this requires more than just planting trees. A range of innovative carbon storage techniques are being explored, including injecting CO2 into rocks, concrete, seawater, or bio-oil, all contributing to the fight against climate change.

05:01

🌲 The Limits of Tree Planting and Scaling Technology

While planting trees is a straightforward carbon capture solution, it's not scalable enough to meet the 10 billion tons CO2 removal target due to land constraints. Direct air capture technology, like that used by Climeworks, offers a more scalable solution. Climeworks, in partnership with Carbfix, has launched a facility in Iceland capable of permanently storing CO2 by mineralizing it underground. With substantial financial backing, Climeworks is scaling its technology and expects to lower the cost of carbon removal significantly by 2030.

10:07

🛢️ Charm Industrial’s Bio-Oil and Cheaper Carbon Capture

Charm Industrial's approach to carbon removal focuses on converting crop residues into bio-oil, which is then injected deep underground for long-term storage. This method leverages the natural carbon-capturing ability of plants, making it less expensive than direct air capture. The conversion process, called pyrolysis, is still costly but expected to decrease over time. Charm's customers, including Stripe, Microsoft, and Shopify, have already purchased carbon removal services, and the company is working to reduce costs to $50 per ton in the future.

🏗️ CarbonCure: Storing CO2 in Concrete

CarbonCure’s technology involves injecting captured CO2 into concrete, where it becomes permanently mineralized. This process not only reduces emissions but also strengthens the concrete, enabling producers to use less cement. While CarbonCure is currently preventing new emissions by sourcing CO2 from industrial facilities, it aims to achieve full carbon removal by converting captured CO2 into concrete products. The technology is already used in nearly 600 plants worldwide, including high-profile projects like Amazon's new headquarters.

🌊 Ocean-Based Carbon Removal with Planetary Hydrogen

Planetary Hydrogen aims to reduce atmospheric CO2 by adding antacids to seawater, decreasing ocean acidity and increasing its capacity to absorb more CO2. This method capitalizes on the natural balance between atmospheric and oceanic CO2. By turning CO2 into bicarbonate, which remains in seawater for thousands of years, Planetary Hydrogen seeks to offer a scalable solution to carbon storage. Shopify is an early customer, and while current costs are high, the company expects them to drop as the technology scales.

💡 Diverse Carbon Removal Technologies and Market Growth

Various technologies for capturing and storing CO2, including direct air capture, geologic, biologic, and ocean-based methods, are being developed and are benefiting from increased funding. While early investments from tech companies like Stripe and Shopify are driving initial growth, larger carbon markets will be necessary to scale these efforts to the required level by 2050. Global carbon pricing schemes, such as those in Europe, Canada, and China, are setting the stage for further expansion. U.S. government support, including a $3.5 billion program for direct air capture hubs, will also play a critical role.

Keywords

💡Carbon Removal

Carbon removal refers to the process of extracting carbon dioxide (CO2) from the atmosphere to mitigate climate change. In the video, it's discussed as a crucial step in preventing global warming, with companies like Stripe, Alphabet, and Shopify investing in startups developing carbon removal technologies. The goal is to remove 10 billion tons of CO2 annually by 2050, using methods like direct air capture and converting plant biomass into bio-oil for underground storage.

💡Direct Air Capture

Direct Air Capture (DAC) is a technology that captures CO2 directly from the air using fans and chemical processes. The video highlights companies like Climeworks and Carbon Engineering, which are at the forefront of DAC innovation. This method is scalable and necessary to meet the demands of reducing atmospheric CO2. One example in the video is Climeworks' Icelandic facility that permanently stores CO2 by turning it into stone underground.

💡Carbon Storage

Carbon storage is the process of permanently sequestering CO2, typically underground, to prevent it from re-entering the atmosphere. The video explains various storage techniques, such as injecting CO2 into rocks, concrete, or underground reservoirs. An example is Carbfix's method of injecting CO2 into basalt formations, where it mineralizes into stone within two years.

💡Carbon Markets

Carbon markets are systems where carbon credits can be bought and sold, providing financial incentives for reducing or removing CO2. The video describes how carbon pricing schemes in countries like China and those in Europe and Canada drive the demand for carbon removal technologies. These markets are expected to grow, further encouraging innovations in carbon capture and storage.

💡Enhanced Oil Recovery

Enhanced Oil Recovery (EOR) is a technique where CO2 is injected into oil wells to extract more petroleum. The video notes that while this process sequesters CO2, it results in more oil production and burning, negating the benefits of carbon removal. It remains the largest market for captured CO2, though it does not lead to negative emissions, highlighting the challenge of finding true carbon removal solutions.

💡Pyrolysis

Pyrolysis is a process that heats biomass to high temperatures to break it down into bio-oil and other substances. In the video, Charm Industrial uses pyrolysis to convert agricultural waste into bio-oil, which is then stored underground. This process is presented as a cheaper alternative to direct air capture since plants naturally capture CO2 before the conversion.

💡Advance Market Commitment

An Advance Market Commitment (AMC) is a financial mechanism designed to incentivize the development of new technologies by guaranteeing future demand. The video explains how companies like Stripe, Alphabet, and Shopify formed the Frontier initiative, committing nearly $1 billion to purchase carbon removal services by 2030. This commitment helps signal demand to startups, encouraging innovation and reducing costs in the carbon removal industry.

💡Mineralization

Mineralization is the process by which CO2 is chemically converted into a stable, solid mineral form, effectively locking it away for hundreds of thousands of years. The video discusses how companies like Climeworks use mineralization to permanently store CO2 in basalt rock formations in Iceland. This process is considered one of the most permanent forms of carbon storage.

💡CarbonCure

CarbonCure is a company that injects CO2 into concrete during the mixing process, where it reacts with calcium to form calcium carbonate. This strengthens the concrete while also permanently storing CO2. The video mentions how CarbonCure has implemented this technology in nearly 600 plants worldwide and how it’s being used in the construction of Amazon's new headquarters in Virginia.

💡Ocean-Based Carbon Capture

Ocean-based carbon capture involves removing CO2 from the atmosphere by leveraging the ocean’s natural ability to absorb carbon. The video highlights Planetary Hydrogen, which adds an antacid to seawater to reduce acidity, enabling the ocean to absorb more CO2. This method aims to restore the ocean’s chemical balance and has the potential to store CO2 for 100,000 years.

Highlights

The carbon removal market is expanding rapidly, with hundreds of millions in investments pouring into the sector.

Companies are innovating with permanent carbon dioxide storage solutions, moving beyond temporary uses like carbonated beverages and fuels.

Major tech companies like Stripe, Alphabet, Meta, and Shopify have committed nearly a billion dollars to carbon removal startups.

Experts estimate the world needs to remove 10 billion tons of CO2 annually by 2050 to mitigate climate change.

Novel carbon storage methods include injecting CO2 into rocks to mineralize it or converting biomass into bio-oil for underground storage.

Climeworks, a leader in direct air capture, partners with Carbfix to permanently store CO2 by turning it into stone underground in Iceland.

Direct air capture technology is scaling, with a Climeworks plant in Iceland having the capacity to remove 4,000 tons of CO2 per year.

Costs for carbon removal through direct air capture are expected to drop from $1,000 per ton today to $200 by the mid-2030s.

Charm Industrial's biomass-to-bio-oil conversion is an emerging method to sequester carbon, with projected costs dropping to $50 per ton.

The largest current market for sequestered CO2 is enhanced oil recovery, though this does not always result in negative emissions.

Planetary Hydrogen is testing ocean-based carbon removal by adding antacids to seawater, allowing oceans to absorb more CO2.

CarbonCure injects captured CO2 into concrete mixes, making concrete stronger and permanently storing carbon while reducing cement usage.

Global demand for carbon removal by 2050 could be as high as 5 billion tons per year, creating a trillion-dollar industry.

Verification of carbon removal efforts remains a challenge, as methods like kelp sinking require different validation than bio-oil injection.

The U.S. government is investing $3.5 billion to develop four direct air capture hubs, each capable of removing over 1 million tons of CO2.

Transcripts

The market for carbon removal is expanding rapidly and hundreds of millions are pouring in.

Companies are pulling carbon dioxide out of the atmosphere, and now there's increased attention on how and where that

CO2 is going to be stored.

The market for carbon dioxide removal has basically had an exponential development over the

past two and a half years.

Major technology companies like Stripe, Alphabet, Meta and Shopify have committed nearly a billion dollars in early

stage funding to carbon removal startups that take legacy carbon emissions out of the atmosphere and store that CO2

permanently. That's different than capturing emissions from a smokestack or recycling carbon to make temporary products

like carbonated beverages, plastics or fuels.

Experts say that we need to remove 10 billion tons of CO2 from the atmosphere every year by 2050.

And to get there, we'll need to do more than plant trees.

No matter how rapidly the world decarbonizes, carbon removal remains a necessity.

We have to do emissions reduction at a massive scale, at a massive pace period.

Full stop. Unfortunately, because we've done such a poor job with that to date, we are now also going to have to do

carbon removal.

There's a whole host of companies researching and implementing novel methods of permanent carbon storage, and

the approaches vary widely.

The CO2 was injected into these rocks and is then mineralized.

The CO2 is injected into concrete.

We're turning it into bicarbonate or baking soda, and then that stays in seawater for

100,000 years.

We convert waste plant residue into this liquid bio oil, and then we inject it deep

underground.

We'll likely need many of these different approaches to avert the worst effects of climate change.

There's no way that there's going to be one pathway, one technology, one way of doing this.

This is going to be a huge portfolio of technologies to take carbon out of the air and store it permanently.

Direct air capture companies like Climeworks and Carbon Engineering, both founded in 2009, are some of the best

known players in this space.

They use giant fans along with complex chemical processes or filters to take CO2 out of the air.

But until recently, there's been no incentive to simply bury that carbon, so they've had to sell it into various

markets. Carbon engineering, for example, has sold its captured CO2 to oil and gas companies that use it for

enhanced oil recovery, in which CO2 is injected underground in order to extract more oil from petroleum

wells. The carbon is sequestered, but since the process produces more oil to be burned, it almost never leads

to negative emissions and is therefore not carbon removal.

Enhanced oil recovery is the largest market for sequestered carbon, and there's nothing else that comes close to that in

terms of scale.

Climeworks says that it will not partner with oil and gas companies, and initially went to market by selling captured

CO2 to greenhouses in Switzerland, where it's used to grow vegetables, and to beverage companies to make carbonated

drinks. But in 2017, Climeworks began working with Carbfix, an Icelandic company that sequesters CO2

permanently by turning it into stone underground.

That's only one of many technical ways to store carbon.

And after the landmark 2018 Intergovernmental Panel on Climate Change report noted the necessity of carbon removal

in limiting global warming to 1.5 degrees Celsius, a number of novel methods emerged.

Charm Industrial, for example, converts carbon-containing biomass like branches, leaves or cornstalks to an

oil which can be injected deep underground.

What really made us convinced that it would become a big market is the fact that by 2050

we need to be removing 10 billion tons a year and it needs to be a trillion dollar a year market.

You know, that came out in the 2018 IPCC report.

As increasingly dire IPCC reports further emphasized carbon removal, startups began popping up left and

right, and private funding has grown quickly.

Stripe, which makes payments processing software, led the way by spending $1 million on carbon removal purchases from

four companies in 2020, and has since increased its commitment to $15 million, adding ten new companies to its

portfolio. And this year, Stripe teamed up with Alphabet, Neta, Shopify and McKinsey to launch an initiative called

Frontier, which plans to purchase $925 million worth of carbon removal by 2030

from a whole host of nascent companies in an effort to accelerate R&D efforts and bring costs down in what's known

as an advance market commitment.

And the idea behind it, advance market commitment, is essentially to send a strong demand signal

to buyers, suppliers, entrepreneurs, investors, researchers that there is going to

be a market for their technologies.

Eric Toone is the technology lead at Breakthrough Energy Ventures, which has made numerous investments in the carbon

removal space.

You have to remember that the scales these are going to have to be built out at almost defy

comprehension. You're talking about building an industry that's three times, five times larger than the global

petrochemical industry today.

The easiest way of capturing and storing carbon is simply planting more trees.

But Jan Wurzbacher, Co-CEO of Climeworks, said that this just won't be enough.

We should do as much as we can of that, but the area that we have available will

just not be sufficient. Like if we wanted to remove 10 billion tons of CO2 from the atmosphere, we'd need the area

of whole Europe.

Therefore, on the other hand, technology-based solutions, namely direct air capture, they are much more scalable.

Through its partnership with Carbfix, Swiss company Climeworks launched a new direct air capture and storage

plan in Iceland this year and recently raised $650 million to scale up its tech further, the biggest funding round that

the carbon removal industry has ever seen.

Partially funded by Stripe, the company's newest plan has the capacity to remove 4000 tons of CO2 per year by

dissolving captured carbon and water and injecting that into basalt rock formations.

The CO2 is injected into these rocks and is then mineralized.

That literally means the CO2 within two years after injection is turned into stone.

So it is solidified a kilometer underground and thereby it is absolutely permanently stored

for the next hundreds of millions of years.

Right now, if an individual wanted to purchase carbon removal from Climeworks, it would cost over $1,000 per ton,

a price Wurzbacher believes will drop to about $200 by the mid 2030's as the company scales up.

But the actual storage part of the equation will be a mere fraction of that, since underground injection is a

relatively simple process.

So it'll be less than 10% of the overall cost.

Peter Reinhardt, CEO of Bay Area-based Charm Industrial, thinks his company's tech will be even cheaper because

charm strategy relies on sourcing crop residue like stalks, stems and leaves from farms, which has already captured

carbon from the atmosphere.

It is substantially cheaper than direct air capture because the plants are already doing the capture for us.

And so we really just need to do the conversion into putting the carbon underground.

Converting biomass to bio oil with a pyrolyzer is the expensive part and why the entire process costs about

$600 per ton right now.

The conversion process from biomass to bio oil is called pyrolysis or fast pyrolysis, and

it's where we first grind down the biomass into really, really tiny pieces so that we can push heat through it

really quickly, and then we heat it up from room temperature to 500 degrees centigrade in less than

a few seconds. And that really fast heating rate vaporizes the cellulose and the

biomass, and then we condense it back into a liquid.

Finally, the bio oil is injected thousands of feet underground, below all water resources, where it

solidifies. Reinhardt says that, geologically speaking, bio oil sequestration can happen in a wider variety of

places than liquid CO2 storage, and that as the company scales, he expects costs to drop to about $50 a ton.

Stripe was Charm's first customer and now others like Microsoft and Shopify have also bought in.

To date, we've sequestered a little more than 5400 tons of CO2 equivalent, and as far as we

know, that was about 90% of permanent carbon removals delivered last year.

While Climeworks and Charm aim to lock CO2 underground, Canadian company CarbonCure is putting that carbon to use by

injecting it into concrete mixes.

This permanently stores the CO2 and has the added benefit of making the concrete stronger, a process we got to see at

the Central Concrete plant in San Jose, California.

The CO2 is injected into concrete and it's reacting with the cement as it's being

batched. And a chemical reaction occurs where the calcium reacts with the

CO2 to form a mineral again.

Calcium carbonate, also known as limestone, but very, very fine.

Why that reaction matters is it's actually increasing the strength of concrete.

Concrete producers like Central are then able to optimize their mixes, so they need to use less cement while

still maintaining very high quality concrete that can be used for any application.

The ability to use less cement is key, since cement production itself produces a lot of emissions.

Less cement, along with market-based incentives for carbon reduction, also help make CarbonCure mixes cost competitive

with traditional concrete.

Right now, CarbonCure's producer partners source their CO2 from large industrial facilities like ethanol plants or

refineries, where it's captured from smokestacks.

That means that CarbonCure isn't involved in removing CO2 from the atmosphere, just preventing new emissions, which

it's doing successfully in nearly 600 plants worldwide.

Stripe was the first company to purchase carbon removal from CarbonCure, and since then, others like Shopify, Mapbox

and Zendesk have done the same, helping Carbon Cure subsidized its costs.

Currently under construction, Amazon's new headquarters in Arlington, Virginia are using CarbonCure's tech.

The company is interested in full-scale carbon removal, though, and is participating in a Department of

Energy-funded partnership with a California-based direct air capture company to convert captured CO2 to concrete

products in Indiana.

Our impact to date is 166,000 metric tons of CO2, but the potential of this

technology is 500 million metric tons annually, and we think we can do that by the end of the

decade.

Another emerging method of permanent carbon removal relies on ocean-based capture and storage.

The oceans store about 88% of our carbon in their chemistry.

Without them, climate change would be far worse than it is now.

Canadian-based Planetary Hydrogen was founded in 2019, and its tech is based on the fact that the relative

concentration of CO2 in the atmosphere and the ocean always remains the same and thus has risen over time.

Because CO2 is an acid, the ocean has become more acidic.

But if we can decrease the acidity of the ocean by lowering CO2 content, the ocean would have more capacity to absorb

additional CO2 from the air.

That's what Planetary is trying to do by adding an antacid to seawater.

So we take an antacid or an alkaline substance, a base that's derived from rocks, and we

purify that so that it really is just a very mild base and we add that into seawater.

So by just simply adding our antacid into seawater, or neutralizing this acidic CO2, we're

turning it into bicarbonate or baking soda.

And then that stays in seawater for 100,000 years.

And what that means is that because the concentration in the ocean of CO2 is lower now, more CO2

will invade from the atmosphere to balance out that concentration basically.

Planetary plans to start open-ocean trials this year by adding its antacid to wastewater treatment facilities, which

already have permits that allow them to clean up water before it goes into the ocean.

Shopify is Planetary's first customer, and at this early stage, Kelland estimates costs are around $800

per ton of CO2 removed, but could drop to about $75 per ton as the company scales.

Overall, the various ways that Climeworks, Charm, CarbonCure, and Planetary are capturing and storing CO2

represents only a small fraction of the carbon removal tech and development.

Other methods of direct air capture, as well as geologic, biologic and ocean-based carbon storage, are all under

development and are also benefiting from the funding boom.

It's an exciting time to be working in this space, but early stage purchases by tech companies and others will only go so

far.

A billion dollars does not a market make, right?

This is a step in the right direction, but certainly does not get us all the way there.

If you zoom out to 2050, we're going to need, say, 5 billion tons per year of carbon

removal at $100 a ton.

That's $500 billion every single year in customer demand for carbon removal.

And that's a conservative estimate of the amount that we'll need to remove.

But there's no doubt that if we're going to do this to try and address climate change, eventually we're going to have

to just capture the CO2 and pump it into the ground and store it for eternity.

And to do that, we need carbon markets.

About 40 countries and over 20 cities, states and provinces already do have some form of carbon pricing.

Launched in 2005, Europe's carbon market is one of the world's oldest and most well established, and since

2019, every jurisdiction in Canada has set a price on carbon, too.

Even China introduced a carbon pricing scheme in 2021, turning the world's largest emitter into the world's largest

carbon market.

I do think that other international markets are going to play a really key role in how carbon removal companies

scale, but they play a role probably farther out on the cost curve and farther out on the deployment curve.

Many industry leaders hope the U.S.

will implement a federal carbon pricing scheme as well and increase the current tax credit for carbon storage, which is

about $35 per ton of geologically sequestered CO2 at about $22 for CO2 that's used in a product like

concrete. Currently, there are no incentives for ocean-based storage methods because verifying the amount of

CO2 captured with this tech is so hard to do.

The way that you measure a ton of kelp sinking is very different from the way that you measure a ton of bio oil

injection. This is a sort of challenge that we are going to need to solve for carbon removal, and we need to solve it in

a way such that this doesn't go the way that offsets went.

Failed offset efforts, such as forest conservation projects that ended up providing little real benefit, have made the

carbon removal industry highly aware of the need to validate each tonne of CO2 removed.

And while some of these technologies may seem a long way from that, Toone is optimistic.

You've got a market that's growing and costs that are that are diminishing.

And so the question is, where do those cross?

It certainly happens this decade.

Carbon removal does generally enjoy bipartisan support in Washington.

And the Department of Energy recently released a $3.5 billion program to develop four direct air capture hubs

across the U.S., with each one intended to permanently remove over 1 million tons of CO2.

I think that government management of a market happens when people decide that it's cheaper to deal

with the CO2 than it is to deal with the consequences of the CO2.

And there is absolutely a growing awareness of exactly what the costs of that carbon are.